A Disturbing Trend March 25, 2009
Posted by whitecollarcrimenews in Misc..Tags: Crime, Fraud, Law, New Jersey, News
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While making money in a law practice isn’t exactly easy these days, I am doing ok. I have a ton of appointments, but the amount of people that have no money, and I mean no money, is amazing. For some lawyers, they are really hurting. As a result, some big firms are laying off staff and others are pushing back start times for new hires. However, it’s what is happening with the very small firms or solos that is very disturbing.
Lately, I’ve seen some lawyers in the criminal courts that I have never seen before, at least not there. Instead of referring out a case, it seems that some lawyers are just pocketing the money and handling the case itself. As a result, I fear that clients will suffer. One of the biggest problems is that many lawyers view c riminal defense as easy. You just beg and beg until the prosecutor gives you a deal that you can convince your client to take. Thus, the only heavy lifting you do is holding your client’s hand when they sign the plea form.
This isn’t just my speculation. I ask a lot of questions when I see someone that I know, for a fact, does not practice criminal law but is before a judge in a criminal court. I had one lawyer this week tell me that he was going to call me for help with his case because he thought the case would be easy but he is running into some serious problems. I asked a few questions about his pre-trial strategy and his head nearly popped off. He then said that he would probably just refer the case to me as he realized that he is in way over his head.
I think this is only going to continue as I hear more and more lawyers complain about the lack of money. I just hope that clients actually do some homework and make sure that the lawyer they want to hire actually has some type of plan to handle the case and is not just taking the money. For example, I just finished a case for a client and she wanted to give me some more business and handle a minor matter for her. I “could” have taken her money, looked at her document and told her everything was fine. Problem is, that would have been a total lie as I don’t know the first thing about that area of law. Thus, I sent the case to another attorney. I also did the exact same thing with an issue that my office manager’s spouse had.
In both cases, I could have made easy money and hoped for the best that my “opinion” of everything being ok was true. However, I always represent my clients like I would want to be represented. Call me crazy, but I would not want to be lied to by my attorney.
New Jersey man faces State charges for alleged ponzi scheme March 20, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, New Jersey, News, Ponzi scheme, theft by deception
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Gary Klein of Colts Neck, New Jersey and the founder of REI Group Inc, has been indicted on one count of theft by deception. The State alleges that his victims, possibly numbering 130, may have lost a total of $8,000,000. Unlike all the other ponzi schemes that came to light after Madoff, this case has actually been around since 2006. It just took a few years for the indictment to come down.
Luckily for Klein, the State charges are nothing compared to Federal charges that Madoff and others are facing. Regardless of what he gets, (the range is about 5 to 7, although he could get up to 10) his actual time behind bars will likely be less than a year. Not bad huh?
Hedge Fund Manager Arrested on Fraud Charges March 18, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, News
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Albert Hu, manager of Asenqua Beta Fund and Fireside LS Fund has been arrested in Hong Kong on fraud charges that were filed in California. Authorities allege that he stole $5 million from his clients by claiming that his funds were associated with well known law firms. One client, a CEO invested $2 million with Hu.
An unknown amount of assets were frozen. Thus, it is unclear as to how much money is left over for the alleged victims. It seems as though this case unraveled much like Madoff and other recent scams where investors asked for their money back and Hu ignored their requests. Hu will be brought back to the US in a few weeks.
Hu left for Hong Kong in June so it seems like he knew something was up. Instead of dealing with it, he may have tried to just run which did not solve anything.
Story is here.
Call the police at the first sign of trouble, or else! March 17, 2009
Posted by whitecollarcrimenews in My Cases.Tags: Crime, Fraud, News
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As an attorney, I have to wear many hats. One of those hats is psychology professor. I am always trying to figure out why people do one thing or the other. I spend a lot of time trying to understand why people speak to the police without an attorney especially in white collar crime situations. In a “street crime” situation, there is often only one interview/interrogation and it may be sudden. Thus, the target may not have enough time to decide if they should call an attorney first. I totally understand that situation.
What I have a problem understanding is the drawn out, white collar crime investigation. For some people, it just never dawns on them to call an attorney to help them. They may have weeks or even many months before the rug is finally pulled out from under them and thus, plenty of time to get an attorney or even just speak with one. Yet, they still just wing it and think that they are in control and can handle it by themselves.
My thoughts on all this come from a new case I have. I was just amazed at all of the contact between the police and my client and the length of time that this all went on for. I don’t want to get into all of the details, but trust me when I say that my client made the case much, much worse by dealing with the police and I don’t just say that because my client made a statement. My client is actually charged with fabricating evidence in attempt to avoid prosecution. What’s worse is if my client would have called me at the first sign of trouble, or any time before the client allegedly fabricated evidence for that matter, the case would have been rather easy to handle and there would not have been any criminal charges.
Here is a good example, although not involving white collar crime. Client A is charged with sexually touching his teenage step-daughter. Client B is charged with raping a young child. Client A made was called by the police and agreed to make a statement. Client B called my office at the first sign of trouble. We met with officials and he denied any involvement but was not subject to intense questioning. Client A was arrested and his family hire me afterwards. Client B was never charged and the investigation was closed. While I was able to keep Client A out of prison (even though this was almost impossible to do) he had to pay my office about 6 or more times what Client B paid me. So, if nothing else, it pays to hire an attorney first.
Another quick example. Client C is arrested for $3000 of credit card fraud. While he made a statement after arrest, he would have had an amazing defense without the statement. Client D is accused of $150,000 in credit card fraud. He hires me before turning himself in and I am able to get the charges torn up before he turns himself in and I work out a great settlement with the credit card companies that is interest free. Once again, Client D pays me much less than Client C.
Bottom line, call an attorney ASAP if you even think you could be suspected of any criminal activity.
The politics of a plea; what did Madoff do? March 10, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, Madoff, News, Ponzi scheme, Scam, theft
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It looks like Madoff (Bernard L. Madoff Investment Securities or BLMIS), is going to plea out and as a result, die in prison. He will also have to pay back a ton of money. However, the Government claims that there is no plea agreement. I can’t buy this. I see no reason why you would give up your right to stall in an effort to delay going to prison to die. I see no reason why your attorneys would work so hard for months only to just throw in the towel so early. Why even get a good attorney? What are you even paying them to do.
Here’s what this boils down to. He is going to take the hit and give back money in exchange for something. My guess is that this something, this bargain, involves his family. However, the Government wants to look like the white knight here with no blood on their hands. It is all politics. They say there was no plea agreement and maybe they are right in a technical sense. However, I’m sure there is an agreement that we don’t know about that makes Madoff decide to avoid the trial of the decade (or even century)and plea out so early.
When the media feeds you this garbage, don’t buy it. Article is here.
Former aide to Newark councilmain indicted March 10, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, New Jersey, News, official misconduct
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Melvin Bittle, a former aide to Newark Councilman Ronald Rice Jr., has been charged with second-degree official misconduct, second-degree bribery, and second-degree receipt or solicitation of any benefit by public servant. Bittle allegedly solicited $1000 from a Newark bar owner to resolve problems with the city’s Alcoholic Beverage Control board.
This is the last thing that any politician needs. Hopefully, Councilman Rice, by all accounts a great guy, already has an attorney for this matter and has helped them. Bittle is facing hard time and the last thing you want is him flipping and making up a story about Rice. Thus, if I’m Rice’s attorney, we work with the prosecutor office from the start and cooperate fully. This way, you can show that this guy was rogue and not part of some conspiracy.
Story is here.
Did Donald Trump commit fraud? March 7, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, News
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When I speak with people about white collar crime, I emphasize the blur between what is a white collar crime case versus a civil case. In fact, I often say to a jury, this is just a civil case. Quite often, the only difference is where the money went.
Let’s look at Trump’s most recent failure. Just a quick note, I like Trump so I don’t have a natural bias against him. In 2006, Trump’s company was selling condo’s at Trump Ocean Resort Baja before construction on the property even began. These pre-construction sales are not uncommon. In fact, 188 units were sold for $122 million in one day at a December 2006 event in San Diego. Units for the Mexico property were selling for $300,000 to $3,000,000 and buyers had to put down 30%.
Fast forward to this year. Trump removed his name from the property in January and now the project has folded. The buyers are left with nothing. No property, no refund. Due to Mexican laws, there seems to be little recourse for the buyers due to the collapse of the project. Regardless, there is nothing criminal about a bad condo project in and of itself.
One issue I have is that these people probably didn’t know what they were doing. One woman described the purchase as occurring in less than a minute. There was also a herd mentality here as a large screen showed all the condo’s that were being purchased. Everyone clapped after each sale. They psychology at work there is fascinating.
So, in the middle of all this chaos, I have to imagine that there were many important details that were left out. Of course, this may be the buyer’s problem, or at worst, a civil issue. However, if false information was given, that is fraud, and it seems like there was at least some.
In an October 2007 newsletter to buyers, Ivanka Trump assured them that all Trump projects were immune to a slowdown. Of course, that sounds a lot like someone telling you that you can earn 10%+ every single year regardless of the economy. If the state of the company was much worse but buyers were led to believe otherwise, they may have been able to demand their money back and/or prepare for the possibility of losing all of their money.
The other problem here is that this really wasn’t a “Trump” property. Instead, it seems that Trump simply licensed his brand to another company. In fact, he wasn’t even an investor. I doubt any of the buyers knew about this. Of course, how can you blame them when Ivanka told the AP in 2007 that her father was the boss when she was asked about her father’s role in the project. She also said that he was involved in every capacity. Of course, if he is just lending his name to make a profit, he may not be rather involved.
I’m not saying that Donald Trump, his kids or his company should be arrested. I simply do not have that information and that is not my point. The point is, how is what his company did different from some other people that had businesses fail but are later arrested? Sometimes the company is more tightly controlled and you can show that the person running the company bought a new house, car, etc. Thus, the inference is that this was a scam to enjoy the luxury lifestyle. However, with a large company where no one person enjoyed an immense, direct profit, it is hard to pin down who profited and who is responsible. Especially when the business is vast and the failing project was just a small part of the overall business.
Of course, I have many clients where the business failed, there is no luxary and yet, there is still an arrest. In those cases, I think it comes down to who you are, who you know and whether the people who lost money have the means or ability to sue you. When it is too late to file a lawsuit or too expensive, criminal courts are used as a collection agency or just to satisfy a need for revenge.
Article is here.
Morris County corrections officer faces prison on charges he was paid by inmate in jail March 4, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, New Jersey, News, official misconduct
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Lee Maimone, a Morris County corrections officer allegedly worked out a deal with an inmate to receive $60,000 in exchange for unspecified preferential treatment. Apparently, he only received partial payment. As a result, he is charged with second degree official misconduct.
The investigation was led by the New Jersey State Police Official Corruption Unit, Division of Criminal Justice, the Morris County Prosecutor’s Office with help from the Morris County Sheriff’s Office.
Should be interesting to find out how they were tipped off to this in the first place and what evidence they have on him. First, this has to get moved out of Morris County. I don’t see how he could get a fair trial or fair treatment there. Second, the main defense here is entrapment assuming the evidence is strong. Of course, you have to look at when the inmate became involved with the State. Although the inmate does not work for the State, if he acted under the color of law and entrapped the officer, then the defense has a chance. The inmate will likely have credibility problems as well.
Should be rather interesting. Story is here. Hopefully he gets a good attorney.
Ex-congressman faces long fight in fraud charges March 3, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, money laundering, News, Scams
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Wes Cooley, a former Congressman from Oregon has been charged with filing false tax returns and several counts of money laundering. Authorities allege that Cooley and two other men who were associated with the former auction site, bidbay.com used the Internet to get investors to buy unregistered stock. Cooley is also alleged to have lied to investors when he claimed that eBay would buy the company for $20 per share.
The unregistered stock issue is usually a red flag here and it will likely be a major issue if this case goes to trial. An example of whay may have happened here is that Cooley and/or others may have registered the stocks with Form S-8, which is for securities issued by a company to employees or certain types of consultants. This is a short-form document that is not as detailed as registration forms required for a public offering of stock. As a result, a public sale of the stock can done without informing the public about the company’s true condition or status.
While not the end of the world, I think Cooley’s biggest problem will come from the money laundering charges. When it comes to white collar crimes like this, the case is usually very circumstantial. For example, no one witnessed a person stealing money out of a safe. The Government will take various business transactions and other activities and argue that everything put together shows that the activity is illegal.
The claim that eBay would buy the company for $20 could have been a misunderstanding or could have come from someone else. After all, everyone can make a mistake or be a bad businessman. Getting people to buy stock; that’s what you do as an officer of the company. However, if all of your activities are legit, why hide the source of the money? That is the problem here.
However, like many of the Ponzi scheme defendants I have blogged about, Cooley is old. At 76 years old, where is he really going here? His best defense may be to flip and secure a four year sentence to he can get out in his 80′s. However, this could be tough due to the was the Federal sentencing schemes work. But, if it doesn’t happen, there is nothing else to do but fight all the way.
Story is here.
